Required informationProblem 14-44 (LO 14-2)The following information applies to the questions displayed below.]Volunteer Corporation reported taxable income of $500,000 from operations this year. Thecompany paid federal income taxes of $105,000 on this taxable income. During the year, thecompany made a distribution of land to its sole shareholder, Rocky Topp. The land's fair marketvalue was $75,000 and its tax and E&P basis to Volunteer was $25,000. Rocky assumed amortgage attached to the land of $15,000. The company had accumulated E&P of $750,000 atthe beginning of the year.Problem 14-44 Part ee. What is Rocky's income tax basis in the land received from Volunteer?Income tax basis

Tax basis is the value of an asset that is used for computing gain or loss when the asset is sold.…

Answered: Required information Problem 14-44 (LO…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At the beginning of the current year, Maple Corporation (a calendar year taxpayer) has accumulated E & P of $140,000. During the year, Maple incurs a $120,000 loss from operations that accrues ratably. On July 1, Maple distributes $85,000 in cash to Asya, its sole shareholder. Assume Asya has sufficient basis for the distribution. How is Asya taxed on the distribution? Of the $85,000 distribution, ($fill in the blank 1) is taxed as a dividend and ($fill in the blank 2) represents a return of capital.
The ABC company bought land 2 years ago for $20,000. The FMV, now is $24,000 the corporation still owes $15,000 on this purchase. The company makes a non liquidating distribution of this property to a stockholder who accepted the debt. What is the tax effect to the shareholder of receiving this distribution? A. This is no tax effect to an owner who receives a nonliquidating distribution B. Shareholder must recognize income of $9000 C. Shareholder must recognize income of $20,000 D. Shareholder must recognize income of $24,000
Taxpayer: Domestic Corporation engaged in retail business Taxable year: 8th year of operation Taxable period data: Item IN Sales 2,500,000 Cost of sales 1,000,000 Allowable deductions excluding NOLCO 1,350,000 NOLCO 100,000 Total assets excluding land on which the business plant/equipment/office is located 10,000,000 Assuming corporation uses itemized deductions, how much is the net taxable income? How much is the regular corporate income tax? How much income tax should the corporation pay for the taxable year?
3
15-6
Required information [The following information applies to the questions displayed below] Riverbend Incorporated received a $410,000 dividend from Stock it held in Hobble Corporation. Riverbend's taxable Income is $2,520,000 before deducting the dividends-received deduction (DRD), a $83,000 NOL carryover, and a $181,000 charitable contribution. Use Exhibit 16-7 Note: Round your tax rates to 2 decimal places. Leave no answer blank. Enter zero if applicable. e. What is Riverbend's DRD assuming it owns 93 percent of Hobble Corporation (and is part of the same affiliated group)? DRD
Prime Corp. is an accrual basis, calendar year C corporation. Its current year reported book income before federal income taxes was $300,000, which included $17,000 corporate bond interest income. A $20,000 expense for term life insurance premiums on corporate officers was incurred. Prime was the policy owner and beneficiary. What was Prime's current year taxable income as reconciled on Prime's Schedule M-1, Reconciliation of Income (Loss) per Books With Income per Return, of Form 1120, U.S. Corporation Income Tax Return? A. $320,000 B. $300,000 C. $283,000 D. $280,000
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For 20X1, XYZ Corporation has a Gross Income of $ 1,000,000 and a total of Ordinary and Necessary Expenses of $ 600,000. Expenses include an item of $ 50,000 for Donations. All items are presented on a tax basis. The entity has not incurred net operating losses or received dividend income. Determine the amount of deductible donations for XYZ Corporation in 20X1. Select one: O a. S45,000 O b. S35,000 O c. SO O d. $50,000
1. George operates a business that generated revenues of $50 million and allocable taxable income of $560,000. Included in the computation of allocable taxable income were $900,000 of business interest expense, $20,000 of business interest income, and $180,000 of depreciation. What is the maximum business interest deduction that George will be eligible to claim this year if the business does not qualify under the gross income test? a) $168,000 b) $560,000 c) $612,000 d) $452,000 2. Mike started a calendar-year business on September 1stSeptember 1st of this year by paying 12 months of rent on his shop at $550 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method? a) $6,600 under the cash method and $6,600 under the accrual method b) $6,600 under the cash method and $2,200 under the accrual method c) $2,200 under the cash method and $2,200 under the accrual method d) $2,200 under the cash method and zero under the…
15-7
The Dawg corporation has Gross Income of $2,800,000 not including Municipal Bond Interest of $60,000, and deductions of $850,000. Calculate Dawg's tax liability. A B D E 1 2 Taxable Liability = 3 4 5 7 8 10

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